Chapter 12 Building E-Commerce Applications and Infrastructure

1. Chapter 12Building E-Commerce Applications and Infrastructure Prentice Hall, 2003

2. Learning Objectives • Discuss the major steps in developing an EC application • Describe the major EC applications and list their major functionalities • List the major EC application development options along with their benefits and limitations • Describe various EC application outsourcing options • Discuss the major components of an electronic catalog and EC application suite Prentice Hall, 2003

3. Learning Objectives (cont.) • Describe various methods for connecting an EC application to backend systems and databases • Describe the criteria used in selecting an outsourcing vendor and package • Understand the value and uses of EC application log files • Discuss the importance and difficulties of EC application maintenance Prentice Hall, 2003

4. Tracking United Parcel Service (UPS) Shipments • The Problem • UPS has provided the means for customers to track their shipments to determine the status and whereabouts of a particular package for some time this was accomplished over the telephone • Customers would call UPS with the tracking number • Operator would look up the status of the shipment and relay the information to the customer • Servicing cost about $2 per call Prentice Hall, 2003

5. Tracking United Parcel Service (UPS) Shipments (cont.) • The Solution • UPS created a Web site (ups.com) in 1996-97 that enabled customers to: • Track their shipments online • Determine the cost and transit time for delivery of a package • Schedule a package for pickup • Locate the nearest drop-off facility Prentice Hall, 2003

6. Tracking United Parcel Service (UPS) Shipments (cont.) • The Results • UPS site services over 4 million online tracking requests per day • Also offers: • Option of tracking their packages through wireless devices • A set of e-commerce solutions and a technology infrastructure that enables other companies to incorporate UPS’ online order entry, shipping, and tracking capabilities • E-commerce tools and services for managing a an enterprises’ overall supply chain Prentice Hall, 2003

7. Landscape and Framework of EC Application Development • Development process • Step 1: EC architecture creation plan includes: • Business goals and vision for the site • Information and data required to fulfill the goals and vision • Application modules that will deliver and manage the information and data • Specific hardware and software on which the application modules will run, • Human resources and procedures for implementing the architecture Prentice Hall, 2003

8. Landscape and Framework of EC Application Development (cont.) • Step 2: Select a development option—developed in-house, outsourced to another party, or some combination of both • Step 3: Installing, testing, and deploying • Unit testing—testing application software modules one at a time • Integration testing—testing the combination of application modules acting in concert • Usability testing –testing quality of the user’s experience when interacting with a Web site • Acceptance testing—determining whether a Web site meets the original business objectives and vision • Step 4: Operation and maintenance—should be continually updated Prentice Hall, 2003

9. Major EC Applicationsand Their Functionalities • A storefront should offer buyers the means to: • Discover, search, evaluate, and compare products • Select product ad negotiate price • Place an order using a shopping cart • Payment of purchase usually on credit • Order confirmation • Track orders once they are shipped Prentice Hall, 2003

10. Major EC Applicationsand Their Functionalities (cont.) • Merchant’s needs to: • Provide access to personalized catalogs • Provide electronic shopping cart • Verify customer credit and approve purchases • Process the orders (back-end services) • Arrange for product delivery • Track shipments to make sure they are delivered • Provide the means for buyers and visitors to register, make comments, or request additional information Prentice Hall, 2003

11. Major EC Applicationsand Their Functionalities (cont.) • Merchants (cont.) • Answer customers’ questions • Analyze purchases in order to customize buyers’ experiences • Provide Web-based post-sale support • Create the capability for cross-sell and up-sell • Provide language translation if needed • Measure and analyze the traffic at the site Prentice Hall, 2003

12. Major EC Applicationsand Their Functionalities (cont.) • A storefront must contain three interrelated subsystems: • Merchant system or storefront that provides the merchant’s catalog and shopping cart • Transaction system for processing orders, payments, and other aspects of the transaction • Payment gateway that routes payments through existing financial systems Prentice Hall, 2003

13. Major EC Applicationsand Their Functionalities (cont.) • Supplier sell-side site: • Personalized catalogs and Web pages for all major buyers • B2B payment gate • Electronic contract negotiation features • Product configuration by customers • Affiliate program capabilities • Business alerts Prentice Hall, 2003

14. Major EC Applicationsand Their Functionalities (cont.) • Procurement E-procurement site is an online intermediary that offers businesses access to hundreds of parts and services provided by suppliers • Catalog Management • Collaborative Planning • On-line Purchase • Purchase Order Handling • Document Service • Historical Performance Service • Information Service • System Administration Prentice Hall, 2003

15. Major EC Applicationsand Their Functionalities (cont.) • Aggregating catalogs • Search engine for locating items with particular characteristics • Comparison engine for alternative vendors • Ordering mechanism • Budget and authorization feature • Usage comparisons (among various departments) • Payment mechanism (e.g., use of a purchasing card) Prentice Hall, 2003

16. Major EC Applicationsand Their Functionalities (cont.) • Reverse auctions • Catalog of items to be tendered and their content management • Search engine • Personalized pages for potential large bidders • Reverse auction mechanism • Facility to help prepare, issue, manage, and respond to a buyer’s requests for quotes (RFQs) • Ability to bid dynamically • Automatic vendor approval and workflow Prentice Hall, 2003

17. Major EC Applicationsand Their Functionalities (cont.) • Reverse auctions (cont.) • Electronic collaboration with trading partners • Standardization of RFQ writing • A site map • A mechanism for selecting suppliers to participate • Automatic matching of suppliers with RFQs • Automatic business process workflow • Ability for bidders to use m-commerce for bidding • Automated language translation Prentice Hall, 2003

18. Major EC Applicationsand Their Functionalities (cont.) • Exchanges • Collaboration services • Community services • Web-automated workflow • Integrated business process solutions • Central coordination of global logistics • Integration services Prentice Hall, 2003

19. Major EC Applicationsand Their Functionalities (cont.) • Exchanges (cont.) • Data mining, customized analysis and reporting, real-time transactions, trend and customer behavior tracking • Transaction flow managers • Negotiation mechanisms • Language translation • Comprehensive links to related resources Prentice Hall, 2003

20. Development Options for EC Applications • Insourcing—in-house development of applications • Development approaches • Build from scratch • Build from components • Prototyping methodology Prentice Hall, 2003

21. Advantages Availability of many off-the-shelf packages Saves time Requires few dedicated personnel Company knows what it is getting Not the first and only user of the software Disadvantages Software doesn’t exactly fit needs May be difficult to modify Loss of control over improvements and versions Difficult to integrate Vendors may drop product or go out of business Development Options forEC Applications (cont.) Buy the applications (turnkey approach) Prentice Hall, 2003

22. Development Options forEC Applications (cont.) • Lease • Types of leasing vendors • Lease the application from an outsourcer and install it on company premises • Use an application system provider (ASP) • Application service provider (ASP) A company that provides business applications to users, for a small monthly fee—go online to use the equipment and software that resides with the ASP Prentice Hall, 2003

23. Development Options forEC Applications (cont.) • Other development options • E-marketplaces, exchanges, auctions, or reverse auctions • Joint ventures and consortia • Internet malls • ISPs • Telecommunications companies • Software houses Prentice Hall, 2003

24. Flexibility Information requirements User friendliness Hardware and software resources Installation Maintenance services Vendor quality and track record Estimating costs Measuring benefits Personnel Technology evolution Scaling Sizing Performance Reliability Security Criteria for Selecting a Development Approach Prentice Hall, 2003

25. Third-Party EC Components and Suites • Electronic catalogs Virtual-world equivalent of traditional product catalog, containing product descriptions and photos, along with information about various promotions, discounts, payment methods, and methods of delivery • Merchant server software Electronic catalog Prentice Hall, 2003

26. Third-Party EC Components and Suites (cont.) • Features of electronic catalogs • Templates or wizards for creating a storefront and catalog pages • Electronic shopping carts • Web-based order forms for making secure purchases • A database for maintaining product descriptions, pricing, and customer orders • Integration with third-party software for calculating taxes and shipping costs and for handling distribution and fulfillment Prentice Hall, 2003

27. Third-Party EC Components and Suites (cont.) • EC suite—combined set of tools giving builder and users: • Greater flexibility • Specialization • Customization • Integration • Support for complete functionality Prentice Hall, 2003

28. Internetworld Commerce Suite Channel marketing Order management Account management Customer service Websphere Commerce Suite Order management Collaborative filters Portal capabilities Multicultural support E-coupons Additional bundled products Catalog manager Payment manager EC Suites Prentice Hall, 2003

29. Connecting to Databases and Other Enterprise Systems • Multi-tiered application architecture • EC architecture consisting of four tiers • Web browser—data presented to and collected from the user • Web server—delivers Web pages • Application server—executes business rules • Database server—data is stored, managed, and requests processed Prentice Hall, 2003

30. Connecting to Databases and Other Enterprise Systems (cont.) • Enterprise application integration • Aims to integrate applications (including internal applications) that have been developed by different organizations • If source code is unavailable (altering the application is not possible), EAI becomes the glue between the applications Prentice Hall, 2003

31. Vendor and Software Selection • Steps in selecting software package • Identification potential vendors • Determination the evaluation criteria • Evaluate vendors and packages • Choose a vendor and package • Negotiate a contract • Establish service level agreement Prentice Hall, 2003

32. Vendor and Software Selection (cont.) • Identification potential vendors; eliminate: • Too small vendors • Vendors with questionable reputations • Packages without required features • Packages that don’t fit with hardware, operating system, network, etc. Prentice Hall, 2003

33. Vendor and Software Selection (cont.) • Determination the evaluation criteria • Characteristics of the vendor • Functional requirements of the system • Technical requirements the software must satisfy • Amount and quality of documentation provided • Vendor support of the package Prentice Hall, 2003

34. Vendor and Software Selection (cont.) • Evaluate vendors and packages determine the gaps between • Company’s needs as specified by the requirements • Capabilities of the vendors and their application packages Prentice Hall, 2003

35. Vendor and Software Selection (cont.) • Choose a vendor and package • Additional development effort required to tailor the system to the company’s needs or to integrate it into the company’s environment • Opinions of users and IT personnel who will have to use and support the system Prentice Hall, 2003

36. Vendor and Software Selection (cont.) • Negotiate a contract • Specify price of software • Determines the type and amount of support to be provided by the vendor • Use software purchasing specialists who assist in negotiations and write or approve the contract Prentice Hall, 2003

37. Vendor and Software Selection (cont.) • Establish service level agreement Formal agreements regarding the division of work between a company and its vendors • Define the partners’ responsibilities • Provide framework for designing support services • Allow company to retain as much control as possible over their own systems Prentice Hall, 2003

38. Usage Analysis and Site Management • Access log A record kept by a Web server of every time a user accesses the server; kept in a common log file format, each line of this text file details an individual access • Pageviews by time bucket • Pageviews by customer logging-in status • Pageviews by referrer • Pageviews by visitor’s hardware platform, OS, browser and/or browser version • Pageviews by visitor’s host Prentice Hall, 2003

39. Site Management andUsage Analysis (cont.) • E-commerce management tools from BMC Corp. at bmc.com • Patrol for e-business management • Measures Web response time • Firewall administration • Application servers: • Patrol for Microsoft • Open market • Netscape Prentice Hall, 2003

40. Managerial Issues • What is our business perspective? • Do we have a systematic development plan? • Insource or outsource? • How should we choose a vendor/software? • Have we analyzed the data? Prentice Hall, 2003

41. Summary • Discuss the major steps in developing an EC application • Describe the major EC applications and list their major functionalities • List the major EC application development options along with their benefits and limitations • Describe various EC application outsourcing options • Discuss the major components of an electronic catalog and EC application suite Prentice Hall, 2003

42. Summary (cont.) • Describe various methods for connecting an EC application to backend systems and databases • Describe the criteria used in selecting an outsourcing vendor and package • Understand the value and uses of EC application log files • Discuss the importance and difficulties of EC application maintenance Prentice Hall, 2003